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Chrysler drags DaimlerChrysler down; Siemens satisfied with results; German economy could improve in the second half

The company's U.S. Chrysler division isn't flying high.

Chrysler Drags DaimlerChrysler profits down

DaimlerChrysler posted an operating profit of €0.6 billion ($0.68 billion) for the second quarter of 2003 (down almost 65% on the €1.7 billion ($1.95 billion) booked in the same period of 2002) in what it described as “a difficult global economic environment.” As widely expected, the Chrysler group reported a loss, while all other divisions improved their earnings, in some cases significantly. Despite the loss, the results were better than financial markets had expected and the company’s stock price rose by five percent. For the year as a whole, Chrysler is still striving to achieve a slightly positive operating profit on an ongoing basis but DaimlerChrysler sees “substantial risks due to the potential development of the competitive environment in the United States.” It is still hoping to achieve a group operating profit of about €5 billion for the full year.

Profits dip at Siemens

German electronics giant Siemens said Thursday its net profit fell sharply in the third quarter of its business year. But operations had dipped less and most key divisions were improving, the company said. Siemens, which runs its business year from October to September, said net profits dropped 12.8 percent to €632 million ($727 million) in the period from April to June. Siemens attributed the decline to increased pension obligations and deeper losses from its stake in semi-conductors maker Infineon. "I'm satisfied with our third-quarter results," said chairman Heinrich von Pierer. "I expect a similarly positive performance in the fourth quarter." Sales slumped 15 percent to €17.38 billion.

Economic improvement approaching

Bundesbank President Ernst Welteke said the economies of Germany and other Eurozone countries could improve in the second half of 2003. The fiscal policy of the European Central Bank was appropriate and did not block any improvement, he said. "If no further shocks materialize, the economic development in Europe will pick up in the fall," he said. But, he added that this required more trust in the economy, not last through more dependable federal policies.